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Business Models Threatened
The fact that traditional Microsoft partners are trying to figure out how to make money or compete against Microsoft's new offerings is completely understandable, says Ken Winell, CEO of Expertcollab, a SharePoint-focused solution provider in Florham Park, N.J. "Certainly, if I was a hosted Exchange partner, I would think my core model is threatened," he said.
"On the other hand, if I had an Exchange implementation business, I would be trying to figure out how I could capitalize on the offering and attach my firm's services and expertise, while taking advantage of the lower licensing costs and operating expenses," Winell added.
CRN interviewed several Microsoft channel partners at WPC who said they have no sympathy for VARs that grumble about the business changes Microsoft is requiring of them in Software Plus Services. Their message to disgruntled VARs is: Services expand the opportunity for partners, so shut up and sell them. PointBridge's Golden agrees. "If some partners fall off, there will be others that come on to fill the void very quickly," he said.
Channel partners that want to add value will have to study situations and find new places to do so, but these efforts will help them remain viable in the future, said Eilert Giertsen Hanoa, CEO and founder of Mamut ASA, an Oslo, Norway-based solution provider. "The alternative for partners who are not seeing this as a necessary evolution is that it will happen with Microsoft, or it will happen with someone else," he said.
In a Q&A during his keynote speech last week at WPC, Microsoft CEO Steve Ballmer echoed this sentiment when asked to comment on the fears some hosting partners have that Microsoft will eventually compete with them. "I think it's probably fair to say that cloud services will grow faster than the hosting opportunity, but that doesn't mean hosting isn't going to grow," Ballmer said. "And certainly, if we don't do cloud services, our key competitors will do them, and we can't give them the edge and innovation that provides. So we're supporting both models."
Next Steps
Microsoft said it's in the process of training its partner account managers to clearly explain the benefits of Software Plus Services to channel partners, and is also developing online training and educational tools that partners can use to get up to speed, according to Marie Huwe, general manager of partner marketing in Microsoft's Worldwide Partner Group.
"The goal is to help partners describe the model, and reinforce that it's working today," Huwe said. "We want partners to understand the importance of the partner ecosystem and their role in the strategy, using real-world examples."
But while Microsoft made good progress at WPC in explaining the channel's role in the Software Plus Services future, some VARs told CRN they think the software giant still needs to work on its messaging. Ultimately, that's where the strategy will sink or swim in the eyes of the channel.
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